For each of the above independent situations, prepare the adjusting entries that must be made on December 31, 20X1, worksheet assuming no previous adjusting entries have been made during the year.
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
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![Journal entry worksheet
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3
Record an adjusting entry for advertising expired.
Note: Enter debits before credits.
Date
Dec 31, 20X1
General Journal
Debit
Credit](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff79fcacf-f17e-496c-8bc5-1465285ed933%2F8cb643ba-e4fe-45e7-8ef8-7c9d370ea28a%2Fl4k6rlb_processed.jpeg&w=3840&q=75)
![a. On December 31, 20X1, the Notes Payable account at Tsang Manufacturing Company had a balance of $18,000. This balance
represented a three-month, 8.5 percent note issued on November 1.
b. On January 2, 20X1, Hitech Computer Consultants purchased flash drives, paper, and other supplies for $6,230 in cash. On
December 31, 20X1, an inventory of supplies showed that items costing $1,620 were on hand. The Supplies account has a balance
of $6,230.
c. On October 1, 20X1, South Dakota Manufacturing paid a premium of $14,640 in cash for a one-year insurance policy. On December
31, 20X1, the Prepaid Insurance account has a balance of $14,640.
d. On June 1, 20X1, Headcase Beauty Salon signed a one-year advertising contract with a local radio station and issued a check for
$13,200 to pay the total amount owed. On December 31, 20X1, the Prepaid Advertising account has a balance of $13,200.
For each of the above independent situations, prepare the adjusting entries that must be made on December 31, 20X1, worksheet
assuming no previous adjusting entries have been made during the year.
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Journal entry worksheet
3
Record an adjusting entry for insurance expired.
Note: Enter debits before credits,
4
Date
Dec 31, 20X1 Insurance expense
Prepaid insurance
General Journal
Debit
Credit](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff79fcacf-f17e-496c-8bc5-1465285ed933%2F8cb643ba-e4fe-45e7-8ef8-7c9d370ea28a%2Ff40z21e_processed.jpeg&w=3840&q=75)
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